Chapter 7 Bankruptcy

Bankruptcy chapter 7 is a liquidation process where your non-exempt assets are sold by an appointed trustee so that the collected funds can be used to pay back creditors based on chapter 7 bankruptcy code. In most cases the majority of your assets will be considered exempt making the liquidation process unnecessary.

Bankruptcy chapter 7 is considered the most simple and fastest bankruptcy proceeding. Individuals, married couples and commercial enterprises are all eligible to file.

What is Bankruptcy Chapter 7?

If you find yourself facing a financial crisis, bankruptcy chapter 7 might be the solution that gives you the opportunity to start over financially. This is the most common type of consumer bankruptcy. This form of bankruptcy help bring relief to those suffering from financial stress caused by unsecured debt caused by credit cards, medical bills pay day loans and utility bills.

In order to file bankruptcy chapter 7, you need to meet specific qualifications. You can take a means test to verify eligibility for filing bankruptcy chapter 7, or contact a bankruptcy lawyer for more information. A lawyer will also be able to answer any questions you have about the process.

The Filing Process

A chapter 7 case typically begins with a lawyer filing an official petition, schedules and statement of affairs. These forms will provide information about your assets, debts and other financial history. Gathering this information is the most difficult part of the bankruptcy chapter 7 process. It’s very important to make to list each debt, and provide correct contact information. You can also list your exemptions on the appropriate schedule forms.

Meeting of Creditors

Part of the process will include you having to attend a first meeting of creditors, also known as the 341 meeting. The appointed trustee has a right to ask you questions about your assets and liabilities under oath. After the meeting, your appointed trustee will review your financial documents to determine whether or not you are able to begin paying back some of your debts after paying living expenses.

Discharge Debt

Your creditors and trustee will grant you 60 days from the 341 meeting to challenge your right to file a discharge of debt.  If a creditor contests your discharge, it will not affect or delay the process. Priority taxes, student loans and liens are a few of the debts that cannot be discharged. Discharges are only granted to individual debtors. Corporations and partnerships cannot apply for bankruptcy discharge.